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Will Targeted Advertising Blow-up in 2022?

March 7, 2022


The “Song of the Witches,” in Shakespeare’s MacBeth, begins with the familiar line, “Double, double toil and trouble; Fire burn and caldron bubble.” Those might well be lyrics for a modern tune about the state of digital marketing and the data required to make it work. Martech reporter Trishla Ostwal (@trishlaostwal) reports several Democratic members of Congress have introduced “a bill that would dramatically alter the ways tech companies like Google and Facebook can leverage personal data for online ads. The bill is attracting pushback from, among others, the Interactive Advertising Bureau (IAB). The digital advertising body said the bill could jeopardize an estimated 17 million jobs, primarily at small- and medium-sized businesses that account for a large share in internet economy growth. The IAB — which represents 700 media companies, brands, agencies and technology firms — slammed the bill, saying that it would ‘effectively eliminate internet advertising in the United States’.”[1]


Ostwal observes, “Data-driven digital advertising is the heart of online commerce that helps industries diversify the products and services consumers rely on.” The data upon which digital advertising relies is called market intelligence. Snehal Joshi, Project Manager at Hitech Outsourcing Services, explains, “Market intelligence is all about valuable data that is readily available to businesses. That data helps evaluate your market position, understand your audience, identify risks and growth opportunities, understand trends and dynamics, build effective strategies, and eventually drive organization growth.”[2] Advertisers are concerned new legislation and regulations could upend the current system. Or, as the “Song of the Witches” states, these new restrictions could prove to be “a charm of powerful trouble, Like a hell-broth boil and bubble.”


Why the Concern About Targeted Advertising?


Shakespeare penned another famous line in Romeo and Juliet, “A rose by any other name would smell as sweet.” The fact of the matter is names do matter. Lawmakers have entitled their proposed legislation “The Banning Surveillance Advertising Act” (BSAA). As advertising journalist Allison Schiff (@OSchiffey) observes, “’Surveillance’ is a loaded term, but it’s on the lips of regulators who are working to restrict targeted advertising online on both sides of the Atlantic.”[3] The title of the bill is especially unfortunate in an age when conspiracy theories find ready adherents. Democratic Senator Cory Booker (NJ), one of the sponsors of the bill, stated, “Surveillance advertising is a predatory and invasive practice. The hoarding of people’s personal data not only abuses privacy, but also drives the spread of misinformation, domestic extremism, racial division and violence. With the introduction of the Banning Surveillance Advertising Act, advertisers will be forced to stop exploiting individuals’ online behavior for profits and our communities will be safer as a result.”[4]


Booker’s pronouncement sounds a lot more like an effort to prevent campaigns from influencing voters than it does an effort to save consumers from learning about products they might want to buy. His rhetoric hearkens back the 2016 presidential campaign. During that campaign, the Trump camp hired Brad Parscale (@parscale), a media expert, as the campaign’s digital director. In an enlightening 2017 interview with CBS correspondent Leslie Stahl, Parscale discussed how the campaign was able to target its message to specific individuals in swing states. Parscale told Stahl, “I understood early that Facebook was how Donald Trump was going to win. Twitter is how he talked to the people. Facebook was going to be how he won.”[5] In addition to Facebook, Parscale noted, the campaign used, “Twitter, Google search, other platforms.” Stahl added, “Parscale said the Trump campaign used the technology to microtarget on a scale never seen before — and to customize their ads for individual voters. … To get people to stop and look, he crafted different messages for different people — so that you only got ads about the issues you cared about most.” Besides the obvious result — a Trump presidency — Parscale’s efforts raised a record $240 million in small donations. Regardless of your political leanings, you have to admit the results were impressive.


Unfortunately, Booker and other supporters of the BSAA seem to be painting all targeted ads as “misinformation” that promotes “domestic extremism, racial division and violence.” Such depictions are obviously unfair. At the same time, lawmakers are aware that consumers are demanding more protections for their private data. As a result, a number of states in the U.S. have joined international efforts to protect that data. Banning targeted ads, however, is a step in a different direction. And the U.S. isn’t alone in that effort. Schiff reports that the same week the BSAA was introduced, “European lawmakers voted to support amendments that would greatly restrict behavioral advertising as part of the Digital Services Act (DSA), a piece of proposed legislation looking to tackle harmful content online and make platforms accountable for algorithmic distribution.” She adds, “IAB Europe argues that the DSA could undermine existing consumer laws, including the General Data Protection Regulation, in large part because it overlaps with them.”


Which Way are the Winds Blowing?


Business leaders understand they can be caught flat-footed if they don’t keep apprised of which way political and consumer winds are blowing. For them, the political winds are blowing in the wrong direction when it comes to targeted advertising. Politicians, on the other hand, see a bipartisan issue that is gaining constituency support. Tech writer Tim Sandle (@timsandle) reports, “Data control and privacy is an increasingly important topic. According to a recent Realtime Research survey by Invisibly, 3 out of 4 people do not want targeted marketing ads.”[6] Those results are a little misleading. What is really nettling people is a concern about data privacy. Sandle explains, “Overall the results show most people are concerned with their online privacy and would support changes that would prevent the collecting and sharing of data without consent.” Most businesses understand privacy concerns and are willing to work with consumers in that area. What they are really looking for is some consistency in the laws and regulations so that compliance isn’t so complicated.


Schiff writes, “The headwinds seem to be blowing, but is it even practical — or technically feasible — to outright ban targeted advertising?” Lartease Tiffith, Executive Vice President for public policy at IAB, told Schiff, “The question isn’t whether it is technically feasible [to ban targeted advertising]. It’s absolutely impractical and, if passed, would make the use of data for advertising illegal. It would set the direct marketing business back a century and digital marketing back to the early 1990s.” He went on to note that IAB understands concerns about “privacy and the responsible use of data for advertising.” Nevertheless, he notes, “National privacy reform has taken a back seat to other issues in DC and, as we know, individual states are moving forward with their own privacy laws. The compliance cost and complexity, if left unabated, will significantly hinder the thousands of small and mid-sized businesses that rely upon data-driven advertising for their livelihoods. This cannot continue — we need a federal privacy law.”


You can count Daniel Castro (@castrotech), Director of the Center for Data Innovation, in the camp of skeptics about the usefulness of legislation banning targeted advertising. He explains, “A chorus of voices in European politics have started echoing a common refrain: using personal data for targeted advertising tramples consumer rights and harms society and the only way to stop this injustice is to ban these types of ads. But those pushing for a ban are not the altruistic digital saviors they portray themselves to be. Instead, many of them have direct financial interests in creating a regulatory system that forces businesses to adopt their business model, even if it comes at the expense of consumer welfare.”[7]


Concluding Thoughts


Will consumers really be better off if targeted advertising is banned? Castro points out, “Revenue from targeted ads support a vast array of free content and services on the Internet.” Most consumers couldn’t afford to pay separately for all those services, especially in developing countries. Michele Szabocsik, Vice President of marketing at BlueConic, adds, “The BSAA may be rightly rooted in rising consumer expectations for privacy and an increasingly unpalatable browsing experience thanks to advertising overload. But it’s an excessive and broad-strokes approach to solving the problem. Unlike GDPR, which requires companies to gain explicit consent in order to use an individual’s personal data for advertising purposes, this legislation intends to outright ban it.”[8] Szabocsik recommends “a more balanced legislative approach [that] would put the onus on advertisers, publishers and ad tech companies to clean up their acts.” She explains, “This means requiring advertisers and publishers to do three things: be transparent about how they use the data they collect, explicitly ask for permission to use it and deliver ad experiences that actually provide value to the consumer. … When companies are held accountable to these higher standards of trust and transparency, it’s a win-win for consumers and businesses alike.”


[1] Trishla Ostwal, “17 Million Jobs In Jeopardy As New Privacy Bill Aims to Curtail Targeted Ads,” Adweek, 21 January 2022.
[2] Snehal Joshi, “Why Data Quality Is Important for Market Intelligence,” MarketingProfs, 5 January 2022.
[3] Allison Schiff, “Even If Targeted Online Advertising Isn’t Banned – Take Note Of Which Way The Wind Is Blowing,” AdExchanger, 21 January 2022.
[4] Ibid.
[5] Leslie Stahl, “Facebook ‘Embeds,’ Russia and the Trump campaign’s secret weapon,” CBS 60 Minutes, 8 October 2017.
[6] Tim Sandle, “Stop tracking me: Consumers rebelling over targeted ads,” Digital Journal, 28 May 2021.
[7] Daniel Castro, “How ‘Privacy Capitalism’ Is Taking Over European Policy Debates,” Center for Data Innovation, 29 November 2021.
[8] Schiff, op. cit.

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